There was confusion surrounding the legal status of Julian Assange last night after a dispute between his lawyer and Swedish authorities over the validity of an arrest warrant.

The WikiLeaks founder was accused of rape during a trip to Sweden but he has vehemently denied allegations made by two women. Mark Stephens, his London-based lawyer, has called the allegations "false and without basis", and has said they amounted to a smear campaign following recent high-profile political leaks by Assange's organisation. Assange is currently believed to be in the UK.

While the Serious Organised Crime Agency, which is handling the case, said on Tuesday that it had flagged up an Interpol 'red notice' to all UK police forces about the whereabouts of Assange and would arrest him if they discovered his precise location, other reports have suggested that police and security services know where Assange is based as he supplied contact details on arrival in Britain in October and have not arrested him or initiated extradition proceedings because Swedish authorities issued an incorrect European arrest warrant.

"The arrest warrant has been issued in circumstances where Assange has an outstanding appeal in Sweden," Stephens said in the Times, while a police source was quoted as saying Assange's warrant was "not a properly certified warrant so we can't act on it."

Stephens argued that although Assange was originally wanted on a charge of rape, this had been thrown out after a partially successful appeal and which meant that Swedish law did not allow for another arrest warrant for current allegations.

He said British police had probably not taken any action against Assange because the warrant was issued incorrectly rather than because they didn't know where he was.

"The sole ground for the warrant is the prosecutor's blatantly false allegation that he is on the run from justice: he left Sweden lawfully and has offered himself for questioning. An appeal against this decision was filed on Monday and is pending," Stephens said.